MUNJALAU.NS
Munjal Auto Industries Ltd
Price:  
79.81 
INR
Volume:  
172,880
India | Auto Components

MUNJALAU.NS WACC - Weighted Average Cost of Capital

The WACC of Munjal Auto Industries Ltd (MUNJALAU.NS) is 15.2%.

The Cost of Equity of Munjal Auto Industries Ltd (MUNJALAU.NS) is 19%.
The Cost of Debt of Munjal Auto Industries Ltd (MUNJALAU.NS) is 9.5%.

RangeSelected
Cost of equity17.6% - 20.4%19%
Tax rate27.0% - 31.5%29.25%
Cost of debt8.1% - 10.9%9.5%
WACC14.0% - 16.5%15.2%
WACC

MUNJALAU.NS WACC calculation

CategoryLowHigh
Long-term bond rate6.9%7.4%
Equity market risk premium8.3%9.3%
Adjusted beta1.291.35
Additional risk adjustments0.0%0.5%
Cost of equity17.6%20.4%
Tax rate27.0%31.5%
Debt/Equity ratio
0.440.44
Cost of debt8.1%10.9%
After-tax WACC14.0%16.5%
Selected WACC15.2%

MUNJALAU.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for MUNJALAU.NS:

cost_of_equity (19.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.29) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.